EXHIBIT 10.2
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, dated this _____ th day of _____ 1997, between
Vermilion Bancorp, Inc., a Delaware chartered corporation (the "Corporation"),
American Savings Bank of Danville, an Illinois chartered savings bank and a
wholly owned subsidiary of the Corporation (the "Bank"), and Xxxxxxx X. Xxxxxx
(the "Executive").
WITNESSETH
WHEREAS, the Executive is presently an officer of the Corporation and the
Bank (together the "Employers"); and
WHEREAS, the Employers desire to be ensured of the Executive's continued
active participation in the business of the Employers; and
WHEREAS, in order to induce the Executive to remain in the employ of the
Employers and in consideration of the Executive's agreeing to remain in the
employ of the Employers, the parties desire to specify the terms under which
Executive shall be employed and the severance benefits which shall be due the
Executive in the event that his employment with the Employers is terminated
under specified circumstances;
NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein contained, the parties hereby agree as follows:
1. DEFINITIONS. The following words and terms shall have the meanings
set forth below for the purposes of this Agreement:
(a) AVERAGE ANNUAL COMPENSATION. The Executive's "Average Annual
Compensation" for purposes of this Agreement shall be deemed to mean the
average level of compensation paid to the Executive by the Employers or any
subsidiary thereof during the most recent five taxable years preceding the Date
of Termination (or such shorter period as the Executive was employed),
including Base Salary and bonuses under any employee benefit plans of the
Employers.
(b) BASE SALARY. "Base Salary" shall have the meaning set forth in
Section 3(a) hereof.
(c) CAUSE. Termination of the Executive's employment for "Cause" shall
mean termination because of personal dishonesty, incompetence, willful
misconduct, breach of fiduciary duty involving personal profit, intentional
failure to perform stated duties, willful violation of any law, rule or
regulation (other than traffic violations or similar offenses) or final
cease-and-desist order or material breach of any provision of this Agreement.
For purposes of this paragraph, no act or failure to act on the Executive's
part shall be
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considered "willful" unless done, or omitted to be done, by the
Executive not in good faith and without reasonable belief that the Executive's
action or omission was in the best interest of the Employers.
(d) CHANGE IN CONTROL OF THE CORPORATION. "Change in Control of the
Corporation" shall mean a change in control of a nature that would be required
to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A
promulgated under the Securities Exchange Act of 1934, as amended ("Exchange
Act"), or any successor thereto, whether or not the Corporation is registered
under the Exchange Act; provided that, without limitation, such a change in
control shall be deemed to have occurred if (i) any "person" (as such term is
used in Sections 3(9), 13(d) and 14(d) of the Exchange Act) is or becomes the
"beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly
or indirectly, of securities of the Corporation representing 25% or more of the
combined voting power of the Corporation's then outstanding securities; or (ii)
during any period of two consecutive years, individuals who at the beginning of
such period constitute the Board of Directors of the Corporation cease for any
reason to constitute at least a majority thereof unless the election, or the
nomination for election by stockholders, of each new director was approved by a
vote of at least two-thirds of the directors then still in office who were
directors at the beginning of the period.
(e) CODE. "Code" shall mean the Internal Revenue Code of 1986, as
amended.
(f) DATE OF TERMINATION. "Date of Termination" shall mean (i) if the
Executive's employment is terminated for Cause or for Disability, the date
specified in the Notice of Termination, and (ii) if the Executive's employment
is terminated for any other reason, the date on which a Notice of Termination
is given or as specified in such Notice.
(g) DISABILITY. Termination by the Employers of the Executive's
employment based on "Disability" shall mean termination because of any physical
or mental impairment which qualifies the Executive for disability benefits
under the applicable long-term disability plan maintained by the Employers or
any subsidiary or, if no such plan applies, which would qualify the Executive
for disability benefits under the Federal Social Security System.
(h) GOOD REASON. Termination by the Executive of the Executive's
employment for "Good Reason" shall mean termination by the Executive within one
year following a Change in Control of the Corporation based on:
(i) Without the Executive's express written consent, the failure to
elect or to re-elect or to appoint or to re-appoint the Executive
to the office of President-Chief Operating and Managing Officer
of the Employers or a material adverse change made by the
Employers in the Executive's functions, duties or
responsibilities as President-Chief Operating and Managing
Officer of the Employers;
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(ii) Without the Executive's express written consent, a material
reduction by the Employers in the Executive's Base Salary as the
same may be increased from time to time or, except to the extent
permitted by Section 3(b) hereof, a material reduction in the
package of fringe benefits provided to the Executive, taken as a
whole;
(iii) Without the Executive's express written consent, the Employers
require the Executive to work in an office which is more than 30
miles from the location of the Employers' current principal
executive office, except for required travel on business of the
Employers to an extent substantially consistent with the
Executive's present business travel obligations;
(iv) Any purported termination of the Executive's employment for
Cause, Disability or Retirement which is not effected pursuant to
a Notice of Termination satisfying the requirements of paragraph
(j) below; or
(v) The failure by the Employers to obtain the assumption of and
agreement to perform this Agreement by any successor as
contemplated in Section 9 hereof.
(i) IRS. IRS shall mean the Internal Revenue Service.
(j) NOTICE OF TERMINATION. Any purported termination of the Executive's
employment by the Employers for any reason, including without limitation for
Cause, Disability or Retirement, or by the Executive for any reason, including
without limitation for Good Reason, shall be communicated by written "Notice of
Termination" to the other party hereto. For purposes of this Agreement, a
"Notice of Termination" shall mean a dated notice which (i) indicates the
specific termination provision in this Agreement relied upon, (ii) sets forth
in reasonable detail the facts and circumstances claimed to provide a basis for
termination of Executive's employment under the provision so indicated, (iii)
specifies a Date of Termination, which shall be not less than thirty (30) nor
more than ninety (90) days after such Notice of Termination is given, except in
the case of the Employers' termination of Executive's employment for Cause; and
(iv) is given in the manner specified in Section 10 hereof.
(k) RETIREMENT. "Retirement" shall mean voluntary termination by the
Executive in accordance with the Employers' retirement policies, including
early retirement, generally applicable to the Employers' salaried employees.
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2. TERM OF EMPLOYMENT.
(a) The Employers hereby employ the Executive as President-Chief Operating
and Managing Officer and Executive hereby accepts said employment and agrees to
render such services to the Employers on the terms and conditions set forth in
this Agreement. Unless extended as provided in this Section 2, this Agreement
shall terminate three (3) years after the date first above written. Prior to
the third annual anniversary of the date first above written and each annual
anniversary thereafter, the Boards of Directors of the Employers shall
consider, review (with appropriate corporate documentation thereof, and after
taking into account all relevant factors, including the Executive's
performance) and, if appropriate, explicitly approve a one-year extension of
the remaining term of this Agreement. The term of this Agreement shall continue
to extend each year if the Boards of Directors so approve such extension unless
the Executive gives written notice to the Employers of the Executive's election
not to extend the term, with such notice to be given not less than thirty (30)
days prior to any such anniversary date. If the Boards of Directors elect not
to extend the term, they shall give written notice of such decision to the
Executive not less than thirty (30) days prior to any such anniversary date. If
any party gives timely notice that the term will not be extended as of any
annual anniversary date, then this Agreement shall terminate at the conclusion
of its remaining term. References herein to the term of this Agreement shall
refer both to the initial term and the successive terms.
(b) During the term of this Agreement, the Executive shall perform such
executive services for the Employers as are consistent with his title of
President-Chief Operating and Managing Officer.
3. COMPENSATION AND BENEFITS.
(a) The Employers shall compensate and pay Executive for his services
during the term of this Agreement at a minimum base salary of $ ______ per year
("Base Salary"), which may be increased from time to time in such amounts as
may be determined by the Boards of Directors of the Employers. In addition to
his Base Salary, the Executive shall be entitled to receive during the term of
this Agreement such bonus payments as may be determined by the Boards of
Directors of the Employers.
(b) During the term of the Agreement, Executive shall be entitled to
participate in and receive the benefits of any pension or other retirement
benefit plan, profit sharing, management recognition, stock option, employee
stock ownership, or other plans, benefits and privileges given to employees and
executives of the Employers, to the extent commensurate with his then duties
and responsibilities, as fixed by the Boards of Directors of the Employers. The
Employers shall not make any changes in such plans, benefits or privileges
which would adversely affect Executive's rights or benefits thereunder, unless
such change occurs pursuant to a program applicable to all executive officers
of the Employers and does not result in a proportionately greater adverse
change in the rights of or benefits to Executive as compared with any other
executive officer of the Employers. Nothing paid
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to Executive under any plan or arrangement presently in effect or made
available in the future shall be deemed to be in lieu of the salary payable to
Executive pursuant to Section 3(a) hereof.
(c) During the term of this Agreement, Executive shall be entitled to paid
annual vacation in accordance with the policies as established from time to
time by the Boards of Directors of the Employers. Executive shall not be
entitled to receive any additional compensation from the Employers for failure
to take a vacation, nor shall Executive be able to accumulate unused vacation
time from one year to the next, except to the extent authorized by the Boards
of Directors of the Employers.
(d) During the term of this Agreement, the Employers shall pay the annual
membership dues for professional and other associations and fees in connection
with continuing professional education.
(e) The Employers shall provide continued medical insurance in the
Employers' health plan for the benefit of the Executive and his spouse for
life, whether or not the Executive is employed full time by the Employers, and
such insurance shall be comparable to that which is provided to the Executive
as of the date of this Agreement notwithstanding anything to the contrary in
this Agreement and regardless of whether the Executive is eligible to
participate in the Employers' health plan. Executive (or his estate in the
case of Executive's death) shall reimburse Employers for all premiums on such
medical insurance for insurance coverage beginning on a date two years after
death, Disability or Retirement of Executive. This Section 3(e) shall not apply
if the Employee is employed full-time by an employer other than the Corporation
or the Bank or if Executive or his estate discontinues reimbursement of
Employers.
(f) In the event of the Executive's Disability, Retirement or death during
the term of this Agreement, the Executive, the Executive's spouse, estate,
legal representative or named beneficiaries (as directed by the Executive in
writing) shall be paid on a monthly basis the Executive's Base Salary (as
defined in Section 3(a) hereof) in effect at the time of the Executive's
Disability, Retirement or death for a period of twelve (12) months from the
date of the Executive's Disability, Retirement or death.
(g) The Executive's compensation and expenses shall be paid by the
Corporation and the Bank in the same proportion as the time and services
actually expended by the Executive on behalf of each respective Employer.
4. EXPENSES. The Employers shall reimburse Executive or otherwise
provide for or pay for all reasonable expenses incurred by Executive in
furtherance of, or in connection with the business of the Employers, including,
but not by way of limitation, automobile and traveling expenses, and all
reasonable entertainment expenses (whether incurred at the Executive's
residence, while traveling or otherwise), subject to such reasonable
documentation and other limitations as may be established by the Boards of
Directors of
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the Employers. If such expenses are paid in the first instance by
Executive, the Employers shall reimburse the Executive therefor.
5. TERMINATION.
(a) The Employers shall have the right, at any time upon prior Notice of
Termination, to terminate the Executive's employment hereunder for any reason,
including without limitation termination for Cause, Disability or Retirement,
and Executive shall have the right, upon prior Notice of Termination, to
terminate his employment hereunder for any reason.
(b) In the event that (i) Executive's employment is terminated by the
Employers for Cause, or (ii) Executive terminates his employment hereunder
other than for Good Reason, Executive shall have no right pursuant to this
Agreement to compensation or other benefits for any period after the applicable
Date of Termination. In the event that the Executive's employment is terminated
due to Disability, Retirement or death, the Executive's rights shall be as
provided in Section 3(f) hereof.
(c) In the event that (i) Executive's employment is terminated by the
Employers for other than Cause, Disability, Retirement or the Executive's death
or (ii) such employment is terminated by the Executive (a) due to a material
breach of this Agreement by the Employers, which breach has not been cured
within fifteen (15) days after a written notice of non-compliance has been
given by the Executive to the Employers, or (b) for Good Reason, then the
Employers shall, subject to the provisions of Section 6 hereof, if applicable,
(A) Pay to the Executive, in thirty-six (36) equal monthly installments
beginning with the first business day of the month following the Date of
Termination, (a) a cash severance amount equal to three (3) times the
Executive's Average Annual Compensation, or (b) in the event that Executive's
employment is terminated by Executive for Good Reason, a cash severance amount
shall equal two (2) times the Executive's Average Annual Compensation.
(B) Maintain and provide for a period ending at the earlier of (i) the
death of the Executive or (ii) the date of the Executive's full-time employment
by another employer (provided that the Executive is entitled under the terms of
such employment to benefits substantially similar to those described in this
subparagraph (B)), at no cost to the Executive, the Executive's continued
participation in all group insurance, life insurance, health and accident,
disability and other employee benefit plans, programs and arrangements in which
the Executive was entitled to participate immediately prior to the Date of
Termination (other than stock option and restricted stock plans of the
Employers), provided that in the event that the Executive's participation in
any plan, program or arrangement as provided in this subparagraph (B) is barred
or during such period any such plan, program or arrangement is discontinued or
the benefits thereunder are materially reduced, the
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Employers shall arrange to provide the Executive with benefits substantially
similar to those which the Executive was entitled to receive under such plans,
programs and arrangements immediately prior to the Date of Termination.
6. LIMITATION OF BENEFITS UNDER CERTAIN CIRCUMSTANCES. If the payments
and benefits pursuant to Section 5 hereof, either alone or together with other
payments and benefits which Executive has the right to receive from the
Employers, would constitute a "parachute payment" under Section 280G of the
Code, the payments and benefits pursuant to Section 5 hereof shall be reduced,
in the manner determined by the Executive, by the amount, if any, which is the
minimum necessary to result in no portion of the payments and benefits under
Section 5 being non-deductible to either of the Employers pursuant to Section
280G of the Code and subject to the excise tax imposed under Section 4999 of
the Code. The determination of any reduction in the payments and benefits to
be made pursuant to Section 5 shall be based upon the opinion of independent
tax counsel selected by the Employers' independent public accountants and paid
by the Employers. Such counsel shall be reasonably acceptable to the Employers
and the Executive; shall promptly prepare the foregoing opinion, but in no
event later than thirty (30) days from the Date of Termination; and may use
such actuaries as such counsel deems necessary or advisable for the purpose. In
the event that the Employers and/or the Executive do not agree with the opinion
of such counsel, (i) the Employers shall pay to the Executive the maximum
amount of payments and benefits pursuant to Section 5, as selected by the
Executive, which such opinion indicates that there is a high probability do not
result in any of such payments and benefits being non-deductible to the
Employers and subject to the imposition of the excise tax imposed under Section
4999 of the Code and (ii) the Employers may request, and Executive shall have
the right to demand, that the Employers request, a ruling from the IRS as to
whether the disputed payments and benefits pursuant to Section 5 hereof have
such consequences. Any such request for a ruling from the IRS shall be
promptly prepared and filed by the Employers, but in no event later than
thirty (30) days from the date of the opinion of counsel referred to above, and
shall be subject to Executive's approval prior to filing, which shall not be
unreasonably withheld. The Employers and Executive agree to be bound by any
ruling received from the IRS and to make appropriate payments to each other to
reflect any such rulings, together with interest at the applicable federal
rate provided for in Section 7872(f)(2) of the Code. Nothing contained herein
shall result in a reduction of any payments or benefits to which the Executive
may be entitled upon termination of employment under any circumstances other
than as specified in this Section 6, or a reduction in the payments and
benefits specified in Section 5 below zero.
7. MITIGATION; EXCLUSIVITY OF BENEFITS.
(a) The Executive shall not be required to mitigate the amount of any
benefits hereunder by seeking other employment or otherwise, nor shall the
amount of any such benefits be reduced by any compensation earned by the
Executive as a result of employment by another employer after the Date of
Termination or otherwise.
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(b) The specific arrangements referred to herein are not intended to
exclude any other benefits which may be available to the Executive upon a
termination of employment with the Employers pursuant to employee benefit plans
of the Employers or otherwise.
8. WITHHOLDING. All payments required to be made by the Employers
hereunder to the Executive shall be subject to the withholding of such amounts,
if any, relating to tax and other payroll deductions as the Employers may
reasonably determine should be withheld pursuant to any applicable law or
regulation.
9. ASSIGNABILITY. The Employers may assign this Agreement and its rights
and obligations hereunder in whole, but not in part, to any corporation, bank
or other entity with or into which the Employers may hereafter merge or
consolidate or to which the Employers may transfer all or substantially all of
its assets, if in any such case said corporation, bank or other entity shall by
operation of law or expressly in writing assume all obligations of the
Employers hereunder as fully as if it had been originally made a party hereto,
but may not otherwise assign this Agreement or its rights and obligations
hereunder. The Executive may not assign or transfer this Agreement or any
rights or obligations hereunder.
10. NOTICE. For the purposes of this Agreement, notices and all other
communications provided for in this Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by certified or
registered mail, return receipt requested, postage prepaid, addressed to the
respective addresses set forth below:
To the Employers: Board of Directors
Vermilion Bancorp, Inc.
000 Xxxxx Xxxxxxxxx
Xxxxxxxx, Xxxxxxxx 00000
To the Executive: Xxxxxxx X. Xxxxxx
0 Xxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
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11. AMENDMENT; WAIVER. No provisions of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is agreed to
in writing signed by the Executive and such officer or officers as may be
specifically designated by the Boards of Directors of the Employers to sign on
its behalf. No waiver by any party hereto at any time of any breach by any
other party hereto of, or compliance with, any condition or provision of this
Agreement to be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any prior or
subsequent time.
12. GOVERNING LAW. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the United
States where applicable and otherwise by the substantive laws of the State of
Illinois.
13. NATURE OF OBLIGATIONS. Nothing contained herein shall create or
require the Employers to create a trust of any kind to fund any benefits which
may be payable hereunder, and to the extent that the Executive acquires a right
to receive benefits from the Employers hereunder, such right shall be no
greater than the right of any unsecured general creditor of the Employers.
14. INTERPRETATION AND HEADINGS. This agreement shall be interpreted in
order to achieve the purposes for which it was entered into. The section
headings contained in this Agreement are for reference purposes only and shall
not affect in any way the meaning or interpretation of this Agreement.
15. VALIDITY. The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other
provisions of this Agreement, which shall remain in full force and effect.
16. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
17. REGULATORY PROHIBITION. Notwithstanding any other provision of this
Agreement to the contrary, any payments made to the Executive pursuant to this
Agreement, or otherwise, are subject to and conditioned upon their compliance
with Section 18(k) of the FDIA (12 U.S.C. Section 1828(k)) and any regulations
promulgated thereunder.
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IN WITNESS WHEREOF, this Agreement has been executed as of the date first
above written.
Attest: VERMILION BANCORP, INC.
_____________________________ By: ___________________________
Attest: AMERICAN SAVINGS BANK
OF DANVILLE
_____________________________ By: ___________________________
EXECUTIVE
By: ___________________________
Xxxxxxx X. Xxxxxx
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